Segar.— The Flood of Gold. 



131 



Again, average prices depend not only on the supply of 

 gold, but also, amongst other things, on the demand for 

 gold. Now, simultaneously with the increased output of gold 

 of fifty years ago there took place a great extension of rail- 

 ways and improvement in transit facilities, with a rapid 

 development of new countries, that caused generally an ex- 

 traordinary expansion of industry — -e.g., the exports of Eng- 

 land increased from £60,000,000 in 1818 to £165,000,000 

 in 1860 ; and the increased trade and prosperity required 

 an increased coinage even to keep prices at the same level. 

 No correspondingly great development of trade, &c, can be 

 expected in the near future. 



Further, the existence of an effective bimetallic area of 

 considerable extent tends to minimise the effects of an 

 increase in the total gold currency. For, if gold tends to 

 depreciate, the bimetallic countries will import and coin 

 gold to replace the silver, which they will export. And so 

 we find France in 1850-65 taking gold and exporting silver, 

 and during the years 1853-60 actually coining £155,000,000 

 sterling in gold, or some six years' product of the mines. 

 But at the present time, in all the principal countries and 

 commercial centres of the civilised world, gold is the sole 

 standard of value. The demand for gold and silver is no 

 longer alternative as currency. 



As an international measure of value gold has been be- 

 coming more and more isolated, while silver is now more of 

 a mere commodity ; any increase of supply of gold, or any 

 diminution of supply, acts with full force upon the standard of 

 value There is no longer a question of the proportion of any 

 new demand or supply to the total stock of gold and silver, 

 but of its proportion to the total stock of gold alone. 



I see, then, no reasonable escape from the conclusion 

 that in the near future prices must rise, and rise con- 

 siderably. Prices have already risen. 



Mr. Sauerbeck's index numbers representing the average 

 prices of forty-five commodities, compared with the prices of 

 the same articles in 1867-77, are as follows : — 



No. 

 72 

 72 

 68 

 68 

 63 

 62 

 61 

 62 

 64 

 68 

 75 



